Moving to Opportunity, Together

Abstract:

Many couples face a trade-off between advancing one spouse’s career or the other’s. We study this trade-off by analyzing the earnings effects of relocation and the effects of a job layoff on the probability of relocating using detailed administrative data from Germany and Sweden. Using an event-study analysis of couples moving across commuting zones, we find that relocation increases men’s earnings more than women’s, with strikingly similar patterns in Germany and Sweden. Using a sample of mass layoff events, we find that couples in both countries are more likely to relocate in response to the man being laid off compared to the woman. We then investigate whether these gendered patterns reflect men’s higher earnings or a gender norm that prioritizes men’s career advancement. To do this, we develop a model of household decision-making where households place more weight on the income earned by the man compared to the woman, and we test the model using the subset of couples where the man and woman have similar potential earnings. In both countries, we show that the estimated model can accurately reproduce the reduced-form results, including those not used to estimate the model.

Co-authors: Seema Jayachandran , Lea Nassal , Marie Paul , Heather Sarsons, and Elin Sundberg